Citigroup is reportedly planning to acquire Deutsche Bank’s licence in Mexico, for an undisclosed sum, to support its corporate and investment banking operations in the country.
The announcement follows the US bank’s decision to sell the consumer, small business, and middle-market banking operations of its Mexican subsidiary Citibanamex.
With the purchase of Deutsche Bank’s licence, Citi benefits from bypassing the process of independently applying for its own licence, reported Reuters.
Citi, in a statement to Reuters, said: “The acquisition of this licence, which is subject to the receipt of all regulatory approvals, facilitates the pursuit of our consumer exit and ability to continue our institutional operations in Mexico.”
In January this year, Citi initially announced its plans to divest its Mexican retail unit. The company is expected to disclose the details of the buyer by late 2022 or early 2023.
In September, the company said that its retail operation will be known as Banco Nacional de Mexico (Banamex), and the wholesale unit as Citi Mexico.
Mexican corporate Carlos Slim and German Larrea are among the top bidders for the business units, which will be valued between $7bn and $12bn, reported Reuters.
Citi has been present in Mexico for more than a century and will continue its institutional banking operations, along with its Private Banking franchise.
Citi CEO Jane Fraser then said: “The decision to exit the consumer, small business and middle-market banking businesses in Mexico is fully aligned with the principles of our strategy refresh.
“We’ll be able to direct our resources to opportunities aligned with our core strengths and competitive advantages, focus on businesses that benefit from connectivity to our global network, and we will further simplify our bank.”
Last month, the company announced that its Russian subsidiary AO Citibank has agreed to sell its portfolio of personal instalment loans to Russian commercial bank Uralsib.
In addition, the bank has agreed to transfer a portfolio of Russian credit card balances to Uralsib, as part of its efforts to withdraw its operations, and reduce its exposure to Russia.
